BILL REQ. #:  S-0586.4 

Read first time 01/28/13.   Referred to Committee on Trade & Economic Development.

     AN ACT Relating to promoting economic development through tax relief for start-up firms; adding new sections to chapter 82.04 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 82.04 RCW to read as follows:
     The legislature finds that start-up companies serve as one of the strongest sources of new jobs in the United States and the state. The legislature also finds that the survival of new businesses in the state is hampered by the state's tax structure, particularly the business and occupation tax which firms must pay even when they are not yet profitable. It is the intent of the legislature to provide businesses with a fifty percent credit against business and occupation tax owed for the first five years of their operation.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed for each person engaged in a new business in an amount equal to fifty percent of the tax otherwise due under this chapter.
     (2)(a) For the purposes of this section, "new business" means a business that:
     (i) Has not been operating for longer than sixty months. The date that a new business began operating, for purposes of this section, is calculated from the date a registration certification under RCW 82.32.030 was obtained or was required to be obtained under RCW 82.32.030;
     (ii) Has invested fifty thousand dollars or more in capital investments; and
     (iii) Has four or more full-time employees.
     (b) "New business" does not include:
     (i) A business that has been restructured, reorganized, or transferred, unless the majority of the activities to be conducted after the restructuring, reorganization, or transfer are significantly different from the activities previously conducted;
     (ii) A new branch location or other facility except by an existing out-of-state entity first doing business in this state; or
     (iii) A business that is substantially similar to a business currently operated, or operated within the past five years, by the same principals.
     (3) A new business must file an application, in a form and manner required by the department, to qualify for the credit under this section.

NEW SECTION.  Sec. 3   This act takes effect August 1, 2013.